Cheer Up, Corporate America. Your Gloom Is Part of the Problem

The official economic forecast is still chilly for 2023, but a host of indicators suggest things were heating up, not cooling, in the first month of the year. Auto sales had their best month since the first half of 2021. The housing market improved as mortgage rates drifted below 6%, attracting more buyers. And Friday’s jobs report was surprisingly strong.

Now that inflation has shown signs of easing, the Federal Reserve also seems less determined to raise the unemployment rate. Add it all up, and it may be corporate leaders who need to chill a little. Instead of all the noise we heard during earnings season about bracing for a recession, perhaps executives should be preparing to respond to a growth environment that is stronger than they anticipated. That would be better for their companies and could help ensure the economy doesn’t repeat the overstrained supply chains and undersupplied inventories it experienced not so long ago.